For-profit colleges under attack for treatment of veterans

Government agencies scrutinize companies for saddling students with
significant debt and inadequate degrees

For-profit colleges are coming under attack again, this time for allegedly
preying on military veterans.

Sen. Dick Durbin, D.-Ill., is scheduled to
hold a forum on the issue in Chicago Monday and plans to introduce legislation
later in the day that would eliminate the financial incentive for-profit
colleges have to recruit veterans aggressively into pricey programs. It would
also require schools to get more of their revenue from sources other than the
federal government's educational aid programs.

Criticism of for-profit
schools has heated up in recent weeks. Last week, Illinois Attorney General Lisa
Madigan sued Westwood College, claiming for-profit colleges mislead students
enrolled in its criminal justice program, putting them deep in debt and saddling
them with a nearly worthless degree for pursuing careers in Illinois law
enforcement.

Earlier this month, shareholders sued Career Education
Corp., a large for-profit college operator based in Schaumburg, claiming company
officials misled investors about job placement rates for graduates, which led to
a scandal and contributed to a lower stock price.

For-profit colleges are
being scrutinized by Congress, the U.S. Department of Educationand the Justice
Department for saddling students with crushing debt and questionable degrees
that don't lead to jobs in their fields of study. Much of their revenue comes
from federal grants and loans.

Military veterans are being aggressively
recruited, critics claim, because of their lucrative forms of federal aid, such
as GI Bill funds and Department of Defense tuition assistance benefits. That aid
doesn't count toward the 90-10 rule, which bars for-profit colleges and
universities from deriving more than 90 percent of their revenue from the
Department of Education's federal student aid programs. The purpose of the rule
is to ensure that for-profit schools, many of which are publicly held
corporations, are not using taxpayer money as their sole source of
revenue.

A Dec. 8 Senate committee report noted that educational benefits
from the Veteran's Administration and the Department of Defense received by 20
for-profit education companies between 2006 and 2010 increased 683 percent, to
more than a half-billion dollars.

Durbin will propose changing the rule
to 85-15, meaning for-profit colleges would be limited to receiving 85 percent
of their revenue from federal financial aid. Significantly, it would also count
education aid for military personnel toward that 85 percent, eliminating the
special incentive for career schools to recruit veterans.

Brian Moran,
interim president of the Washington-based Association of Private Sector Colleges
and Universities, which represents for-profits colleges, said in a statement
that some legislators "have chosen to erect, rather than break down, the
barriers to critical job-training and educational programs for veterans. Sen.
Durbin's reported legislation on recruiting will only cut off access for
thousands of veterans to the skill-intensive, hands-on programming and intensive
job-placement support that veterans transitioning into the workplace
need."

Those at American Military University, a provider of online
education to active members of the military, contend schools like theirs are
wrongfully lumped with schools using questionable tactics.

"No matter how
well we're doing and how long we've been honorably serving the military, we get
caught up in this because of the broad-brush strokes with this attack on the
for-profit industry," said Jim Sweizer, vice president of military programs at
American Military University, based in Charles Town, W.Va.

He added:
"It's somewhat insulting that they don't give veterans the benefit of the doubt
— these are intelligent people — and (they portray them as) being totally duped
by a school."